NORTH POINTE SPECIFIC PLAN RIPON, CALIFORNIA PUBLIC FACILITIES FINANCING PLAN

Transcription

1 NORTH POINTE SPECIFIC PLAN RIPON, CALIFORNIA PUBLIC FACILITIES FINANCING PLAN FINAL ADOPTED BY THE CITY COUNCIL ON MARCH 8, )University)Ave,)Suite)280) )Sacramento,)CA)95825 Phone:)l916p) ) )Fax:)l916p)

2 Public Facilities Financing Plan TABLE OF CONTENTS Chapter Page I. INTRODUCTION AND ORGANIZATION... 1 A. Purpose of Report...1 B. Project Description...2 C. Report Organization...2 II. LAND USE AND RELATED ASSUMPTIONS... 4 A. Residential Land Uses...4 B. Non-Residential Land Uses...4 C. Estimated Market Values...5 D. Demographic Assumptions...6 III. FACILITY NEEDS AND COST ESTIMATES... 7 A. Summary of Cost Estimates...7 B. Transportation Improvements...8 C. Drainage Improvements...8 D. Parks & Paseos...8 E. Pedestrian Crossings...9 F. Landscaping & Signage...9 G. Specific Plan Costs...9 IV. FINANCING STRATEGY A. Summary of Proposed Financing Methods...10 B. Development Impact Fees...10 C. Mello-Roos Community Facilities District...12 V. FEASIBILITY ANALYSIS A. Total One-Time Impact Fee Burden...15 B. Total Effective Tax Rate 16 VI. IMPLEMENTATION AND ADMINISTRATION A. Updates & Revisions...17 B. Action Items...17 C. Fee Credits & Reimbursements...18 APPENDIX A: LAND USE, INFRASTRUCTURE COST, AND FINANCIAL ANALYSIS APPENDIX B: NPSP INFRASTRUCTURE COST DETAIL

3 I. INTRODUCTION AND ORGANIZATION A. Purpose of Report This Public Facilities Financing Plan (PFFP or Finance Plan) has been prepared to evaluate the ability of land uses proposed in the (NPSP or Specific Plan) to fund required public facilities. The Specific Plan is a public policy document that sets guidelines for the long-term use of land within the NPSP area. Similarly, the PFFP is a long-term look at the financial burdens associated with providing infrastructure to the NPSP area. In summary, this Finance Plan does the following: Describes the proposed land uses as well as developed value and demographic assumptions Summarizes public facilities required to serve future development in the NPSP area Presents the costs of required public facilities Determines Mello-Roos bonding capacity based on marketable tax rates for land-secured financing for non-residential land uses Identifies the total one-time burdens (impact fees) that must be borne by landowners, builders, homeowners, and non-residential property owners, as well as Mello-Roos annual special tax rates that must be levied on non-residential property in order to implement the Finance Plan Assesses the financial feasibility of the project in terms of the one-time fee burden-tovalue ratio and annual effective tax rate Discusses future steps associated with implementation and administration of the Finance Plan This Finance Plan represents the culmination of a cooperative process that involved public and private participants with interests in the North Pointe development project (North Pointe or Project). The Finance Plan will serve as a blueprint to guide individual development applications and ensure that future development conforms to the strategy outlined in this Finance Plan. It must be recognized that the Finance Plan is a test of overall feasibility. As development in North Pointe progresses, the timing and mix of costs and funding sources may change. Furthermore, the assumptions and results are estimates at this time, and actual results may be different. However, regardless of the extent to which proposed financing mechanisms are used or other financing mechanisms are introduced later in the development process, the feasibility of the overall burden has been evaluated in this PFFP. Adopted by the City Council on Public Facilities Financing Plan -1- March

4 B. Project Description The NPSP comprises approximately 310 acres located in the northern part of the City of Ripon (City). The Project is bounded by the Mistlin Sports Park to the north, State Route 99 to the south, Fulton Avenue to the east, and Jack Tone Road to the west. Existing development within the Project includes the Mistlin Sports Park, agricultural uses, trucking facilities, highway service commercial uses, and storage facilities. Currently, the Project area consists mostly of underutilized or undeveloped land. The NPSP calls for a mix of neighborhood and regional serving commercial, technology, office, recreation, entertainment, and residential uses. At build out, the Project is expected to include 1,050 residential units and approximately 1.4 million square feet of non-residential uses. Non-residential uses within the NPSP include approximately 73,000 square feet of office space, 198,000 square feet of mixed-use retail space, 458,000 square feet of general retail space, and 679,000 square feet of campus technology retail uses. An additional 26 acres of sports related commercial and 51 acres of parks and open space are included in the Project area. C. Report Organization The remainder of the Finance Plan has been organized into the following five chapters: Chapter II, Land Use and Related Assumptions: provides a breakdown of anticipated land uses in the NPSP, estimated home and finished building values, and resident and employment figures. Chapter III, Facility Needs and Cost Estimates: summarizes the public facilities required to serve development within the Specific Plan area. Estimated costs for each facility category are also summarized. Chapter IV, Financing Strategy: provides a financing strategy for the NPSP with identification of funding sources to be used to pay for public facilities that are discussed in Chapter III. A summary of the allocation methodology used to estimate the proposed NPSP fee and the estimated special tax rates required to fund public facilities in the NPSP are included. Chapter V, Feasibility Analysis: summarizes the results of two tests used to determine the financial feasibility of the NPSP. Chapter VI, Implementation and Administration: provides a guide for the implementation of this PFFP, the process of updating and administrating the PFFP, future action items, and impact fee credits and reimbursements. In addition, the PFFP includes the following two appendices: Appendix A Land Use, Infrastructure Cost, and Financial Analysis: includes summary tables that contain detailed assumptions related to proposed land uses within the Project, facility Adopted by the City Council on Public Facilities Financing Plan -2- March

5 costs, and a summary of project-specific fees along with other fees that will be levied on development in NPSP. Appendix B NPSP Infrastructure Cost Detail: includes detailed cost estimates for Projectspecific facilities, as provided by the City. Adopted by the City Council on Public Facilities Financing Plan -3- March

6 II. LAND USE AND RELATED ASSUMPTIONS The Project includes a mix of neighborhood and regional serving commercial, technology, office, recreation, entertainment, and residential uses. The Project is expected to include 1,050 residential units and approximately 1.4 million square feet of non-residential uses at buildout. Non-residential uses within the NPSP include approximately 73,000 square feet of office space, 198,000 square feet of mixed-use retail space, 458,000 square feet of general retail space, and 679,000 square feet of campus technology retail uses. An additional 26 acres of sports related commercial and 51 acres of parks and open space are included in the Project area. Table A-1 in Appendix A summarizes the NPSP land uses that are factored into the financial analysis presented in this Finance Plan. A. Residential Land Uses Planned residential development within the Project consists of single family housing with a density range of 5 to 11 units per acre and multi-family housing of 28 units per acre. The Project is expected to include 1,050 single family and multi-family units, which are organized into five broad categories: Single Family (5-8 Units ), Single Family (5-11 Units ), Single Family (8-11 Units ), Multi-Family (28 Units ), and Residential Mixed- Use. The categories and a brief description of each are provided below: Single Family (5-8 Units ): The Project includes 130 single family units with a density range of 5 to 8 units per acre on approximately 26 gross acres. Single Family (5-11 Units ): The NPSP designates approximately 27 gross acres for development of 177 single family units with a density range of 5 to 11 units per acre. Single Family (8-11 Units ): The Specific Plan proposes development of 54 single family units with a density range of 8 to 11 units per acre on approximately 9 gross acres. Multi-Family (28 Units ): The Project includes approximately 24 gross acres for development of 662 multi-family units, which are anticipated to have an average density of 28 dwelling units per net acre. Residential Mixed-Use: Approximately 27 multi-family units on mixed-use land uses are planned to be constructed within the Project. A typical mixed use designation allows for retail such as restaurants, markets, and local retail uses on the ground floor, and multi-family housing above the ground floor. B. Non-Residential Land Uses The Project includes approximately 217 acres designated for non-residential development, including office, mixed-use retail, general retail, campus technology retail, as well as other non- Adopted by the City Council on Public Facilities Financing Plan -4- March

7 residential land uses. Each non-residential land use category and a corresponding description are provided below: Office: The Project includes approximately 5 acres for office uses, located at the intersection of Colony Road and Fulton Avenue. The 5-acre office park is expected to develop into nearly 73,000 square feet of office space. Retail Mixed-Use: There are approximately 33 acres zoned for mixed-use retail within the NPSP area. Future mixed-use retail land uses are located adjacent to the east side of Jack Tone Road and north of Colony Road. The 33-acre mixed-use retail site is planned to include large regional retail serving businesses, agriculture related equipment sales and services, recreation vehicle sales, public uses, and quasi-public uses. Retail General: The NPSP area includes approximately 57 acres zoned for general retail uses located along Colony Road, near the center of the Project. Future development within general retail uses may include markets, restaurants, local serving retail, and personal services. Retail Campus Technology: The Project includes approximately 45 acres zoned for campus technology retail uses, which may include commercial, technology, and office uses. Future campus technology retail land uses are located in the vicinity of State Route 99 to take advantage of highway access and visibility. Typical uses within the 45-acre site may include corporate offices, a college extension campus, electronic device manufacturing sites, medical facilities, large regional retail serving businesses, public uses, quasi-public uses, and public art. Other Non-Residential: Other land uses within the NPSP area include parks, open space, and sports-related uses encompassing approximately 77 acres. These other non-residential areas are not factored in the fee allocation analysis or any other financing mechanism discussed in this PFFP. Consequently, these areas will not be required to pay development impact fees or support the sale of bonds to finance facilities. If different financing measures are selected to fund backbone infrastructure costs in the future, these other non-residential areas will not be required to participate in the new measures as well. C. Estimated Market Values Estimated market values were determined for each residential and non-residential land use category based on sales prices for comparable homes and commercial buildings in the surrounding region and on independent research. The values assumed in the analysis are shown in Table A-1 of Appendix A and range from $300,000 per unit for single family housing with a density range of 8 to 11 units per acre to $350,000 per unit for single family housing with a density range of 5 to 8 units per acre. A market value of $175,000 per unit is assumed for multifamily and residential mixed-use housing. The market value for non-residential land uses range from $175 per developed building square foot for office and campus tech retail land uses to $225 per developed building square foot for mixed-use and general retail land uses. Adopted by the City Council on Public Facilities Financing Plan -5- March

8 D. Demographic Assumptions It is anticipated that development will result in approximately 2,533 new residents and 3,521 employees at build out. Population per household and jobs per acre assumptions are summarized in Table A-1 of Appendix A. Adopted by the City Council on Public Facilities Financing Plan -6- March

9 III. FACILITY NEEDS AND COST ESTIMATES A. Summary of Cost Estimates The NPSP area is currently rural agricultural in nature; therefore, an array of backbone infrastructure and public facilities must be constructed for the site to develop into a thriving part of the City according to the standards delineated in the NPSP. The Specific Plan identifies Project-specific infrastructure needed to meet the needs of the community. Project-specific infrastructure includes transportation improvements, drainage facilities, parks, paseos, pedestrian crossings, landscaping improvements, and signage. The total cost of Project-specific improvements required at build out of the NPSP area is estimated to equal nearly $9.2 million. The $9.2 million amount includes approximately $5.3 million in construction costs, $2.0 million in soft costs, and $1.8 million in contingency costs. In addition, the cost associated with preparing the Specific Plan totals over $0.3 million, for a total cost of approximately $9.5 million. Table A-2 in Appendix A summarizes Project-specific costs by facility type, and Table B-1 in Appendix B includes a detailed cost breakdown for each improvement project, as provided by the City. A summary of the required Project-specific infrastructure costs needed to serve NPSP development is presented in the following table: TABLE III-1 TOTAL NPSP INFRASTRUCTURE COST SUMMARY Improvement Total NPSP Cost Transportation $3,393,000 Drainage $827,000 Parks & Paseos $4,295,000 Pedestrian Crossings $222,000 Landscaping & Signage $416,000 Specific Plan Costs $331,000 Total $9,484,000 Facility requirements and cost estimates are summarized in the remainder of this chapter starting with Section B, Transportation Improvements. Note that backbone water and sewer infrastructure required to serve the Project are incorporated into the City s Public Facilities Fee program, as described in Chapter IV. Adopted by the City Council on Public Facilities Financing Plan -7- March

10 B. Transportation Improvements The proposed roadway system for the NPSP area comprises an internal system of arterial and collector roads, as well as perimeter roads surrounding the Project. While a majority of these transportation improvements is expected to be funded by the City s Public Facilities Fee program, the City has identified several transportation improvements that are specific to the Project. Project-specific transportation improvements include: Special intersection enhancements at Jacktone Road/Colony Road, Jacktone Road/River Road, Colony Road/Hoff Drive, Fulton Avenue/River Road, Jacktone Road/Santos Road, Santos Road/Hoff Drive, and Hoff Drive/River Road Extension of Arc Way from Fulton Avenue to Goodwin Drive Modifications and removal of Dexter Way Lighted crosswalks Bus stops The cost of Project-specific transportation improvements required at build out of the NPSP area is estimated to total approximately $3.4 million. This includes approximately $2.0 million for construction-related costs, $0.7 million for soft costs, and $0.7 million for contingency costs. C. Drainage Improvements As development of the NPSP area grows, expansions to the City s storm water drainage system are necessary to prevent an increase in flooding of downstream properties during major storm events. One of the four primary components of the City-operated drainage system is the South San Joaquin Irrigation District (SSJID) lines and canals which run south along Fulton Avenue. The canal transitions into an above ground concrete canal where the City operates a storm drainage pump station that utilizes the irrigation canal for overflow storm water purposes. The section of the canal within the NPSP area is considered by the City to be a potential future safety hazard and an attractive nuisance for children playing in the Specific Plan area. It is, therefore, planned to be undergrounded as part of the facility improvement within the Project area. Project-specific costs include approximately $0.8 million to pay for the undergrounding of the SSJID canal along Fulton Avenue for safety purposes. D. Parks and Paseos The Project is expected to include an open space corridor that extends from the Mistlin Sports Park in the north to the commercial core area at Colony Road in the south. The corridor is identified as the Central Paseo in the Specific Plan and will have a multi-use trail connecting it to Adopted by the City Council on Public Facilities Financing Plan -8- March

11 all parts of the NPSP area via open space buffers and other components of the pedestrian and bicycle network in the Project. The Central Paseo is anticipated to contain park-like amenities such as benches, picnic tables, and recreational amenities (e.g., open turf area for informal play). In addition, two community parks are planned to be located adjacent to the Central Paseo. The Village Green Park is expected to serve as the central public gathering place for the Specific Plan area because of its prime location, as well as its adjacency to shopping, high density housing, and the Central Paseo. The Village Green Park is anticipated to include open green spaces, gardens, public art, memorials, cultural and outdoor entertainment facilities, picnic areas, and play areas for children. The Triangle Park, along Santos Avenue, is expected to have open spaces and recreational amenities, such as basketball courts and a water feature. Project-specific costs associated with parks and paseos within the NPSP area are estimated to total nearly $4.3 million. E. Pedestrian Crossings The proposed Central Paseo will require major pedestrian crossings at Colony Road, Santos Avenue, and River Road. Project-specific costs provide for the installation of enhanced crossings, which may include pedestrian traffic signals and decorative road surface paving. In all, approximately $0.2 million in pedestrian crossing improvements is needed to serve the expected increase in pedestrian and bicycle traffic associated with the installation of the Central Paseo and the two adjacent parks. F. Landscaping and Signage A gateway at the Project s northern boundary and various landscaped medians are proposed to be developed within the Specific Plan. These improvements are anticipated to resonate with the City s cultural and economic history, agrarian setting, and the community s vision of its future. The gateway north of the NPSP area on Jack Tone Road and the landscaped median along Goodwin Drive are expected to have enhanced landscaping and signage welcoming guests or residents to the City. Overall, approximately $0.4 million in landscaping and signage improvements is needed to serve NPSP Area. G. Specific Plan Costs Each project developer is expected to contribute toward a NPSP document preparation fee to help mitigate the City s expenses associated with preparing the Specific Plan and the EIR. The consolidated fee will ensure costs related to land planning and environmental analysis are shared equally by developers within the NPSP area. A total of approximately $0.3 million in Specific Plan costs is expected to fund the preparation of the Specific Plan, the EIR, and other costs associated with planning the NPSP. Adopted by the City Council on Public Facilities Financing Plan -9- March

12 IV. FINANCING STRATEGY This chapter outlines the Project s overall financing strategy and summarizes the financial analysis used to evaluate the total burdens associated with funding Project-specific facilities required to serve future development in the NPSP area. Capital facilities costs will be funded through a combination of private and public funding sources. A. Summary of Proposed Financing Methods The Financing Plan assumes development impact fees will be the primary funding source for NPSP backbone infrastructure and other public facilities costs. Impact fee revenue will come from a combination of existing and proposed fee programs. As discussed further in Section B.1 below, one existing fee program is the City s Public Facilities Fee (PFF) program, which includes components to fund City infrastructure needs. A summary of the PFF components to which NPSP development will be subject is presented in Table A-9 of Appendix A. The Project s overall PFF obligation is reduced by anticipated fee credits toward the parks component of the PFF program to offset Project-specific park improvement costs, as shown in Table A-8 of Appendix A. In addition, other existing impact fees applicable to future development in the NPSP area are summarized in Table A-10 of Appendix A. A proposed NPSP fee is anticipated to fund the majority of NPSP costs that directly benefit future development within the Specific Plan area but are not funded through existing fee programs or other funding sources described below. Finally, the NPSP financing strategy includes formation of a CFD to fund Project-specific infrastructure that benefits the Project s non-residential land uses. B. Development Impact Fees Development impact fees are monetary exactions (other than taxes or special assessments) that are charged by local agencies in conjunction with approval of a development project. Impact fees are levied for the purpose of defraying all or a portion of the costs of a public facility, improvement, or amenity that benefits the project. The collection of impact fees does not require formation of a special district; an impact fee program is implemented by a public agency s adoption of a resolution or ordinance. Development impact fees are paid by builders or developers, typically at the time a building permit is issued. The public facilities funded by impact fees must be specifically identified, and there must be a reasonable relationship, or nexus, between the type of development project and the need for the facilities, the cost of the facilities, and the need to impose a fee. Impact fees will be an important component of this Finance Plan. Fee revenues will be utilized to the maximum extent possible to reduce costs associated with the issuance of debt or advance- Adopted by the City Council on Public Facilities Financing Plan -10- March

13 funding from developers. Because fees are collected as development occurs and certain facilities will need to be in place prior to development, fee revenues may be collected in future years to reimburse developers that have paid to cover costs prior to the availability of fee revenues. 1. Existing Development Impact Fee Programs Development in the NPSP area is expected to participate in the City s PFF program as well as fee programs to fund school facilities and regional infrastructure. Table A-9 and Table A-10 identify the estimated fees for the PFF and other impact fees, respectively. In all, future development in the NPSP area is expected to pay approximately $70.5 million for public facilities funded through existing impact fee programs ($51.4 million in PFF and $19.1 million in other impact fees). The City s PFF program includes individual fee components to fund citywide transportation improvements, water infrastructure, wastewater facilities, storm drainage improvements, park improvements, recreation facilities, library facilities, city hall improvements, administration facilities, police station improvements, and corporation yard facilities. In addition, the City levies an impact fee to pay for traffic signalization improvements. The Project s overall PFF obligation is reduced by approximately $4.3 million because of fee credits for overlapping park costs that are anticipated to be funded by the Project. Other existing development impact fees include fees administered by the following agencies: (i) the Ripon Unified School District for school facilities; (ii) the Ripon Consolidated Fire District for fire facilities; and (iii) the County of San Joaquin for county facilities, habitat mitigation, and regional traffic infrastructure. The Finance Plan assumes the Project will pay the applicable existing impact fees imposed during the construction and permitting process. 2. Proposed NPSP Fee Program The primary source of funding for Project-specific improvements will be the proposed NPSP fee program. The proposed NPSP fee will be used to fund facilities not covered by existing or proposed financing mechanisms, including various transportation improvements, drainage improvements, parks & paseos, pedestrian crossings, landscaping & signage improvements, and specific plan preparation costs. With input from the City, Project-specific costs anticipated to be funded through the NPSP fee program were spread among the various land uses that benefit from the improvements. To conduct this analysis, a benefit rationale was developed for each facility category, benefit units were selected, and fair share cost allocations were assigned to land uses in NPSP. Based on the benefit allocations, the proposed NPSP fee burdens on each type of land use are established. The proposed NPSP fee program is anticipated to fund approximately $9.5 million of Project-specific infrastructure costs at build out of the Project. Table A-4.1 through Table A-4.6 in Appendix A detail the proposed NPSP fee allocations by land use type Adopted by the City Council on Public Facilities Financing Plan -11- March

14 based on a fair share of all Project-specific costs. These costs are allocated based on a defined benefit unit for each facility type, as summarized in Table A-3. For example, peak hour trip ends are used to allocate transportation costs, runoff coefficients are used to allocate drainage costs, and user equivalents are used to allocate costs associated with parks and paseos. Table A-5 in Appendix A summarizes the estimated NPSP fee burden for each facility by land use type as well as the total NPSP fee burden for each land use. Table A-7 summarizes the total Project-specific burden for each land use. The figures represent a net allocation assuming all Project-specific costs allocated to non-residential uses will be funded through a Mello-Roos CFD, as calculated in Table A-6 and discussed further below. The proposed NPSP fee for residential land uses range from $4,478 per multifamily unit to $7,826 per single family unit with a density range of 5 to 8 units per acre; these amounts include a 3% fee program administration cost. NPSP fee burdens presented in this Finance Plan are subject to change as cost estimates and assumptions continue to be refined, the City makes policy decisions that affect the plan, and actual infrastructure components are installed. Note that the estimated burdens do not account for existing development impact fees (discussed in the previous subsection) or building permit fees that may be required to develop property in the City. Total combined fee burdens are presented in Table A-11 and discussed further in Chapter V of this PFFP. C. Mello-Roos Community Facilities District The Mello-Roos Community Facilities Act (Act) [Section et seq. of the Government Code] was enacted by the California State Legislature in 1982 to provide an alternate means of financing public infrastructure and services subsequent to the passage of Proposition 13 in The Act, which permits cities, counties, and special districts to create defined areas within their jurisdiction and, by a two-thirds vote within the defined area, impose special taxes to pay for the public improvements and services needed to serve that area, complies with Proposition 13 and is consistent with Proposition 218. The Act defines the area subject to a special tax as a Community Facilities District (CFD). A CFD may provide for the purchase, construction, expansion, or rehabilitation of any real or other tangible property with an estimated useful life of at least five years. A CFD may also finance the costs of planning, design, engineering, and consultants involved in the construction of improvements or formation of the CFD. The facilities financed by the CFD do not have to be physically located within the CFD. The facilities that can be financed by a Mello-Roos CFD include, but are not limited to, the following: Roads, water and sewer lines, flood control channels Local park, recreation parkway, and open-space facilities School sites, structures, furnishings, and equipment Adopted by the City Council on Public Facilities Financing Plan -12- March

15 Libraries Child care facilities Utility improvements (limited to five percent of bond proceeds if improvements are to be taken over by a non-publicly owned utility agency) Any other governmental facilities which the legislative body creating the CFD is authorized by law to contribute revenue to, construct, own, or operate School facilities maintenance A CFD may also pay for public services, including the following: Police protection Fire protection Recreation program services Library services Park and open space maintenance Road maintenance Street lighting Flood and storm protection services Removal or cleanup of hazardous substances Sandstorm protection Seismic retrofitting A CFD may only finance the services mentioned above to the extent that they are in addition to those provided in the area before the CFD was created and may not supplant services already available within that area. There are two limitations on the amount of financing available from a CFD, the first being the value-to-lien-ratio. Value is considered to be the appraised value of the property, including entitlements and improvements in place on the date the CFD bonds are to be sold. The value of improvements to be constructed with bond proceeds is included in the value calculation. Lien refers to the proposed Mello-Roos bond issue, as well as any other debt secured by the property. Senate Bill 1464, which became effective January 1993, requires a minimum value-to-lien ratio of 3:1. The second restriction on the amount of financing available from a CFD is the total effective tax rate (ETR) paid by a homeowner or property owner in the CFD. The ETR consists of the basic one percent ad valorem property tax levy mandated by Proposition 13, plus overrides from Adopted by the City Council on Public Facilities Financing Plan -13- March

16 voter-approved bonded indebtedness and non-ad valorem taxes, assessments, and parcel charges (expressed as a percentage of market value). Market value can be determined based on input from local developers, a market consultant, local realtors, or an appraiser. Consistent with City Council Resolution 08-22, the City will not utilize CFDs for the provision of infrastructure for residential development projects. Formation of a CFD authorizes a public agency to levy a special tax on all taxable property within the CFD in the manner prescribed in the formation documents. Property owned or irrevocably offered to a public agency may be exempted from the special tax. Mello-Roos special taxes are collected at the same time and in the same manner as property taxes, unless otherwise specified by the agency. Special tax revenues may be used to pay debt service on bonds sold or may also be used to pay directly for facilities and public services. Mello-Roos bonds can be short or long-term obligations. Typically, long-term bonds have either a twenty-five or thirty year maturity. Short-term notes or bonds can be issued to provide interim funding; these obligations are then retired when another source of revenue becomes available. Due to the flexibility associated with the Mello-Roos Community Facilities Act and the wide range of facilities that can be funded by the Act, the Finance Plan assumes that Mello-Roos bonds will be used to fund all project-specific costs allocated to non-residential land uses within the NPSP area, which is estimated to equal approximately $3.8 million. Table A-6 in Appendix A provides details of the CFD analysis for the Project s non-residential land uses. Special tax revenue is expected to secure bond indebtedness that will fund approximately $3.8 million in Project-specific costs and development impact fees. Table IV-1 below identifies the proposed annual special tax rates for each non-residential land use. TABLE IV-1 TOTAL ANNUAL SPECIAL TAX RATES* Non-Residential Land Use Category Total Annual Special Tax Office Retail Mixed Use Retail General Retail Campus Tech $3,615 $1,915 $2,567 $3,746 Any initial bond issues will be constrained by the appraised value of the land in the CFD and market interest rates at the time bonds are sold. In the event that bonding capacity is limited because of the aforementioned factors, NPSP developers will need to advance-fund the necessary facilities and be reimbursed when bonds can be issued. Adopted by the City Council on Public Facilities Financing Plan -14- March

17 V. FEASIBILITY ANALYSIS This chapter provides a summary of the financial feasibility of proposed development in the NPSP based on the funding strategy proposed in the PFFP. Financial feasibility is defined in terms of the estimated one-time impact fee and the annual special tax burden, both as a percentage of developed value, for each of the proposed land use categories. A. Total One-Time Impact Fee Burden Gross one-time burdens are calculated for each land use category within the NPSP area to assess the financial feasibility of the Project. The gross one-time burden comprises all burdens to which NPSP development will be subject, including the project specific burdens and administration, City PFF, and other agency fees. In addition to analyzing the gross burdens, net one-time burdens are also reviewed. The net onetime burden is determined by offsetting the gross one-time burden by the amount of infrastructure funded by CFD bonds. Due to the City s policy of not permitting the use of CFDs to fund infrastructure for residential development projects, only gross one-time burdens for nonresidential uses are reduced. The total net one-time burdens lie at the heart of the one-time feasibility analysis. When divided by the applicable estimated value, the total net costs are translated into a burden percentage; it is this percentage that presents a meaningful and easily studied comparison. For example, the net one-time burden-to-value ratio for a single family unit with a density range of 5 to 8 units per acre is calculated by dividing the estimated net one-time fee for that unit type by its estimated value. While there are no values in this assessment that guarantee project success, a net one-time burden-to-value ratio of less than approximately 20% is typically considered feasible in this area of the Central Valley based on general industry guidelines and Goodwin Consulting Group s experience. A summary of the gross and net one-time burden-to-value ratios is provided in Table V-1 below. Estimated impact fees presented in this report are subject to change as assumptions continue to be refined, public agencies make policy decisions that affect the NPSP, the PFFP evolves, and actual infrastructure items are installed. However, at this point, all land uses fall within the feasibility range (i.e., total net one-time impact fees total approximately 20% of developed value), as shown in both Table A-11 of Appendix A and Table V-1 below. Adopted by the City Council on Public Facilities Financing Plan -15- March

18 TABLE V-1 GROSS AND NET ONE-TIME BURDEN-TO-VALUE RATIOS Land Use Category Gross Burden-to-Value Ratio Net Burden-to-Value Ratio Residential Single Family (5-8 Units ) 17.7% 17.7% Single Family (5-11 Units ) 18.6% 18.6% Single Family (8-11 Units ) 19.8% 19.8% Multi-Family (28 Units ) 19.9% 19.9% Residential Mixed-Use 20.1% 20.1% Non-residential Office 9.6% 8.6% Retail Mixed-Use 16.8% 14.8% Retail General 13.6% 12.2% Retail Campus Tech 9.6% 8.5% B. Total Effective Tax Rate Similar to the initial net one-time burden-to-value test to determine project feasibility, a second feasibility test involves an analysis of total annual taxes and assessments, including Mello-Roos special taxes, as a percentage of the estimated developed value. It is important to note that the City Council adopted Resolution 08-22, which specifies that the City will not utilize CFDs to provide infrastructure for residential development projects. Table A-6 in Appendix A presents the portion of the ETR related to the proposed Mello Roos special tax on non-residential land uses within the NPSP, which totals approximately 0.14% for a developed acre of non-residential land use. This burden ratio when added to the ad valorem property tax rate in the Specific Plan area, which totals approximately 1.08% of value, results in a total ETR of approximately 1.22% per non-residential acre. While there are no limits for nonresidential development projects, a total ETR of less than 2.0% is generally considered feasible. As the PFFP is implemented, NPSP developers and the City will need to ensure that additional annual burdens (e.g., CFD special taxes to pay for services to the Project) do not exceed the 2.0% limit for both residential and non-residential land uses. Adopted by the City Council on Public Facilities Financing Plan -16- March

19 VI. IMPLEMENTATION AND ADMINISTRATION The NPSP is a long-term plan for both residential and non-residential growth within the City of Ripon and will be subject to updates and revisions in future years as development applications are submitted and processed. Likewise, the PFFP is a blueprint that can be used to guide the preparation of development-specific financing plans and will also be reviewed and revised on an ongoing basis. The NPSP and the PFFP are based on assumptions of land use, facility demands, facility standards and design, and cost estimates. Each of these assumptions may be subject to change in future years; therefore, the PFFP may also be revised to reflect these changes. In addition, when individual project applications are received, the City must determine which facilities will be needed to specifically serve new development and determine which financing mechanisms will be used to pay for improvements. The ongoing implementation of the PFFP will be parallel to the continued monitoring of the NPSP, and will require the same degree of time and effort to keep it current and useful. In this manner, the PFFP will guide the preparation of subsequent plans and the overall funding of community infrastructure required to serve the NPSP. Following is a summary of many of the tasks associated with implementation of the PFFP. A. Updates and Revisions The PFFP should be updated each time there is a change in facility plans, land use plans, or cost estimates. When these items are revised, there will be a corresponding change in the fair share burden to each land use in the NPSP. Land use and facility changes will result in revisions to the benefit analysis and corresponding NPSP fee allocation to each land use. To the extent some projects in the NPSP have been developed and paid their fair share prior to a program update, revisions will apply only to future new development. If facility costs are determined to be higher than estimated in the PFFP, the City will need to increase fees in future years and/or call on developers to fund the extra expenses through the provisions of an acquisition agreement. As the City adopts new ordinances or updates existing ordinances in future years, fees will be adjusted based on actual costs realized after construction bids have been received for public facilities. If actual costs are higher than expected, the City will have to increase fees and/or rely on the terms of an acquisition agreement to avoid a financing deficit in future years. B. Action Items Prior to commencement of development in the NPSP, the City will need to adopt a fee ordinance or resolution implementing a NPSP fee program for each type of capital facility. The initial ordinance will reflect fees based on information available at that time. Fees will be adjusted annually or on a more frequent basis to reflect actual costs and current cost estimates. Adopted by the City Council on Public Facilities Financing Plan -17- March

20 Pursuant to Section of the Government Code, the City will establish a separate NPSP capital facility account and a unique fund for each type of public facility for which fees are collected. Establishment of this account will prevent commingling of the NPSP fees with other City revenues and funds. Interest income earned by fee revenues in this account will be deposited in the account and applied to facility construction costs. Within one hundred eighty (180) days of the close of each fiscal year, the City will make information pertaining to the account [as required by Section (b) (1)] available to the public and will review this information at a regularly scheduled public hearing. In addition, if the developer of a non-residential project requests formation of a Mello-Roos CFD as suggested herein and the responsible public agencies (e.g., the City) concur with that request, each agency must form a financing team made up of experts in the various fields associated with implementation of such districts, including bond counsel, bond underwriter, and special tax consultant. The responsible agency and the designated financing team will be responsible for forming the district, issuing bonds to pay for required facilities, and levying special taxes to ensure timely repayment of bonds. C. Fee Credits and Reimbursements The City will require developers to advance-fund and/or construct certain backbone infrastructure, public facilities, or other associated costs contained in the NPSP. The improvements that are advance-funded may be improvements anticipated to be funded through existing fee programs, the proposed NPSP fee program, bond proceeds, or private financing. If a developer is required to advance-fund or provide shortfall funding for improvements constructed initially, that developer would be entitled to a fee credit or reimbursement from future development in the NPSP. If a developer funds oversizing for areas outside of the NPSP, the developer providing such oversizing should also be entitled to future reimbursements from those development areas generating fees for those facilities. Adopted by the City Council on Public Facilities Financing Plan -18- March

21 APPENDIX A LAND USE, INFRASTRUCTURE COST, AND FINANCIAL ANALYSIS

22 Table A-1 Public Facilities Financing Plan Land Use, Demographics, and Value Assumptions Net Density Population Estimated Gross (Units per Dwelling per Total Value per Total Acres /1 Net Acre) /2 Units Household Population Unit Value Residential Single Family (5-8 Units ) $350,000 $45,500,000 Single Family (5-11 Units ) $325,000 $57,525,000 Single Family (8-11 Units ) $300,000 $16,200,000 Multi-Family (28 Units ) ,390 $175,000 $115,850,000 Residential Mixed-Use / $175,000 $4,725,000 Subtotal ,050 2,533 $239,800,000 Building Building Square Bldg. SF Estimated Gross Intensity Feet per Total Value per Total Acres /1 (Avg FAR) /2 (Bldg. SF) Employee Jobs Bldg. SF Value Non-Residential Office , $175 $12,743,675 Retail Mixed-Use / , $225 $44,560,125 Retail General , ,146 $225 $103,153,500 Retail Campus Tech , ,698 $175 $118,857,725 Subtotal ,408,513 3,521 $279,315,025 Other Land Uses Sports Related 26.0 Parks & Open Space 51.0 Subtotal 77.0 Total $519,115,025 /1 Includes acreage for public and private streets. /2 Excludes acreage for public and private streets. /3 Assumes 50% of the 4 acres planned for Retail/Residential Mixed-Use is residential and the remaining 50% is non-residential. /4 Includes 2 acres associated with the retail component of the Retail/Residential Mixed-Use. Source: ; City of Ripon; Goodwin Consulting Group, Inc.

23 Table A-2 Public Facilities Financing Plan Project-Specific Infrastructure Cost Summary Construction Soft Total Improvement Cost Costs Contingency Cost Transportation Improvements $2,038,000 $677,000 $679,000 $3,393,000 Drainage Improvements $552,000 $110,000 $165,000 $827,000 Parks and Paseos $2,328,000 $1,108,000 $859,000 $4,295,000 Pedestrian Crossings $148,000 $30,000 $44,000 $222,000 Landscaping & Signage $277,000 $55,000 $83,000 $416,000 Specific Plan Costs $331,000 Total $5,343,000 $1,980,000 $1,830,000 $9,484,000 Source: ; City of Ripon; Goodwin Consulting Group, Inc.

24 Table A-3 Public Facilities Financing Plan Capital Facility Benefit Units Capital Transportation Drainage Parks & Pedestrian Landscaping & Specific Plan Facility: Improvements Improvements Paseos Crossing Signage Cost Benefit Peak Hour Runoff User Gross Gross Gross Land Use Unit: Trip Ends Coefficient Equivalents /1 Acres Acres Acres Residential Single Family (5-8 Units ) 1.30 per unit 0.11 per unit 3.01 per unit 1.0 per acre 1.0 per acre 1.0 per acre Single Family (5-11 Units ) 1.30 per unit 0.11 per unit 3.01 per unit 1.0 per acre 1.0 per acre 1.0 per acre Single Family (8-11 Units ) 1.30 per unit 0.11 per unit 3.01 per unit 1.0 per acre 1.0 per acre 1.0 per acre Multi-Family (28 Units ) 0.62 per unit 0.04 per unit 2.10 per unit 1.0 per acre 1.0 per acre 1.0 per acre Residential Mixed-Use 0.62 per unit 0.04 per unit 2.10 per unit 1.0 per acre 1.0 per acre 1.0 per acre Non-Residential Office 13.0 per acre 0.70 per acre 2.17 per acre 1.0 per acre 1.0 per acre 1.0 per acre Retail Mixed-Use 15.0 per acre 0.70 per acre 0.89 per acre 1.0 per acre 1.0 per acre 1.0 per acre Retail General 15.0 per acre 0.70 per acre 1.20 per acre 1.0 per acre 1.0 per acre 1.0 per acre Retail Campus Tech 15.0 per acre 0.70 per acre 2.25 per acre 1.0 per acre 1.0 per acre 1.0 per acre /1 Assumes a resident can utilize parks and paseos an average of 12 hours per day 7 days a week (84 hours) and an employee can utilize parks an average of 1 hour per day 5 days a week (5 hours); this translates to 1.0 employee equaling approx residents (5/84 = 0.06) in terms of potential park utilization. Source: ; City of Ripon; Goodwin Consulting Group, Inc.

25 Table A-4.1 Public Facilities Financing Plan Cost Allocation Transportation Improvements Total Peak Cost per Dwelling Gross Hour Total Percent Total Unit or Land Use Units Acres Trip Ends Trips Allocation Cost Acre Total Cost $3,393,000 Residential per Unit per Unit Single Family (5-8 Units ) % $192,004 $1,477 Single Family (5-11 Units ) % $261,421 $1,477 Single Family (8-11 Units ) % $79,756 $1,477 Multi-Family (28 Units ) % $466,309 $704 Residential Mixed-Use % $19,019 $704 Subtotal 1, % $1,018,509 Non-Residential Office n/a % $73,848 $14,770 Retail Mixed-Use n/a % $562,379 $17,042 Retail General n/a % $971,383 $17,042 Retail Campus Tech n/a % $766,881 $17,042 Subtotal , % $2,374,491 Total , % $3,393,000 Source: ; City of Ripon; Goodwin Consulting Group, Inc.

26 Table A-4.2 Public Facilities Financing Plan Cost Allocation Drainage Improvements Total Cost per Dwelling Gross Runoff Total Percent Total Unit or Land Use Units Acres Coefficient Runoff Allocation Costs Acre Total Cost $827,000 Residential per Unit per Unit Single Family (5-8 Units ) % $71,556 $550 Single Family (5-11 Units ) % $97,427 $550 Single Family (8-11 Units ) % $29,723 $550 Multi-Family (28 Units ) % $132,504 $200 Residential Mixed-Use % $5,404 $200 Subtotal 1, % $336,615 Non-Residential Office n/a % $17,514 $3,503 Retail Mixed-Use n/a % $115,591 $3,503 Retail General n/a % $199,657 $3,503 Retail Campus Tech n/a % $157,624 $3,503 Subtotal % $490,385 Total % $827,000 Source: ; City of Ripon; Goodwin Consulting Group, Inc.

27 Table A-4.3 Public Facilities Financing Plan Cost Allocation Parks & Paseos Total Total Cost per Dwelling Gross User Residents/ Percent Total Unit or Land Use Units Acres Equivalents Employees Allocation Costs Acre Total Cost $4,295,000 Residential per Unit per Unit Single Family (5-8 Units ) % $612,674 $4,713 Single Family (5-11 Units ) % $834,180 $4,713 Single Family (8-11 Units ) % $254,496 $4,713 Multi-Family (28 Units ) , % $2,176,693 $3,288 Residential Mixed-Use % $88,778 $3,288 Subtotal 1, , % $3,966,820 Non-Residential Office n/a % $16,967 $3,393 Retail Mixed-Use n/a % $46,144 $1,398 Retail General n/a % $106,820 $1,874 Retail Campus Tech n/a % $158,249 $3,517 Subtotal % $328,180 Total , % $4,295,000 Source: ; City of Ripon; Goodwin Consulting Group, Inc.